Prudential’s Asia profits soars ahead of UK business demerger

Prudential Plc Headquarters as company to split firm by spinning off UK operations. (Bloomberg pic)

LONDON: Prudential Plc’s focus on Asia is paying off.

Prudential reported that first-half profit from its Asian operations soared 14% to 1.02 billion pounds (US$1.3 billion) on a constant exchange rate basis, ahead of a spinoff that would separate its UK operations from faster-growing markets elsewhere. Operating profit for the company was 2.41 billion pounds in the first half, beating the average estimate of 2.24 billion pounds from four analysts surveyed by Bloomberg.

By splitting into two business, Prudential is seeking to take greater advantage of potential growth in Asia, which generates about a third of its earnings and where new demand for insurance is strongest. The insurer hopes it can roll out retirement solutions it developed in the US to Asia as the population there ages. The firm said the demerger of M&G Prudential, its UK asset management and retirement unit, is on track.

“We have made a good start to 2018, delivering high-quality, profitable growth,” Mike Wells, chief executive officer, said in the statement.

The demerger is unlikely to happen before Prudential completes its sale of 12 billion pounds of annuities to Rothesay Life. After that process is completed, both Prudential and M&G Prudential are likely to be included in the benchmark FTSE 100 Index of the UK’s biggest companies.

M&G saw inflows of 3.5 billion pounds in the first half, while PruFund new inflows were 4.4 billion.